Giuseppe Colangelo and Valerio Torti, looks at ‘Selective Distribution and Online Marketplace Restrictions under EU Competition Rules after Coty Prestige’ (2018) European Competition Journal 14 (1) 81

This paper – which can be found here – looks at the Coty decision, and it structured as follows: Section 2 provides an overview of how EU competition law dealt with selective distribution systems pre-Coty. It begins by looking at the Metro decisions. In Metro I, the CJEU decided that the maintenance of a certain price level for specialist retailers and wholesalers was a legitimate goal. In this decision, the CJEU recognised that that selective distribution agreements are compatible with competition rules if they fulfil three cumulative conditions: (i) the characteristics of the product in question necessitate such a distribution scheme in order to preserve its quality or to ensure its proper use; (ii) resellers are chosen on the basis of objective criteria of a qualitative nature relating to the technical qualifications of the reseller and his staff and the suitability of his trading premises, laid down uniformly for all potential resellers and not applied in a discriminatory fashion; (iii) the…

The CAT’s Paroxetine decision (Paroxetine GSK v CMA [2018] CAT 4)

This post contains a fairly long discussion, so those who are familiar with the case may want to skip it. This decision – which can be found here – concerns  a pay for delay case and identifies a number of interesting questions regarding this type of conduct – some of which were referred to the Court of Justice of the European Union (CJEU). I do not propose to summarise the decision (it is 180 pages long). Instead, I will merely review the parts that I found most interesting. In particular, the judgment contains a very clear discussion of how the law stands as regards pay-for delay agreements in Europe. It also reviews EU law, particularly in the context of the Tribunal’s decision to make a preliminary reference to the CJEU. These questions flow mostly from the debate, apparent in my earlier posts, regarding whether pay-for-delay agreements should be treated as restrictions by object or by effect under EU law following…

Sven Gallasch ‘Activating Actavis in Europe – the proposal of a ‘structured effects-based’ analysis for pay for delay agreements’ (2016) Legal Studies 36(4) 683

This article – which can be found here – criticises the adoption of a ‘by-object’ approach in the EU for pay-for-delay agreements, and argues that Europe should instead adopt a test along the lines of the rule of reason approach delineated by the US Supreme Court’s decision in Actavis. This paper is structured as follows: Section 2 compares the EU and US regulatory frameworks. While broadly consistent with the papers above, this paper emphasises two points which merit attention. First, it is pointed out that the existence of a period of exclusivity for the first generic entry can, when coupled with the possibility of the generic supplier settling a patent validity claim with the branded drug originator, skew the incentives of the parties in favour of settlement to the disadvantage of final consumers. Instead of solving the patent dispute in court, the parties settle their dispute. The generic company is nonetheless granted the 180 days of generic exclusivity. The parties…

Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC & Anor [2017] EWHC 3047 (Comm)

This case – which can be found here – concerns multilateral interchange fees (‘MIF’) yet again. This is one of a number of cases where courts had to decide whether such fees were lawful (for examples, see the cases reviewed in my posts of 30 September 2016, 10 February and 24 March 2017). This one, Sainsbury’s v Visa, is a decision about the lawfulness of Visa’s scheme. The case was brought under the shadow of decisions by the European Commission and a number of courts holding that MasterCard’s MIF scheme was unlawful. In order to understand this case, it is important to first understand how the various credit card systems operate. There are two main credit card models: On the one hand we have three-party schemes, like the ones operated by American Express and Dinner’s Club. In a three-party scheme, the operator (such as American Express) both issues cards and settles transactions with merchants. In other words, when an American…

Cento Veljanowski “Credit Cards, Counterfactuals, and Antitrust Damages” Journal of European Competition Law & Practice (2018) 9(3) 146–160

This paper – which can be found here – provides an overview of the UK MasterCard litigation. Mr. Veljanowski is likely very well placed to discuss this:  he was one of the two economic experts involved in a case recently decided by the CAT on the matter. He also seems to publish a paper about every court decision concerning the MasterCard litigation (see my post of 24 March 2017, regarding the Arcadia v MasterCard case). The paper begins with a quick overview of the MasterCard litigation. As a result of the European Commission’s MasterCard decision, there are currently about 25 separate standalone and follow-on retailer actions making their way through the English courts concerning MasterCard and Visa’s card systems’ interchange fees. The first decision in these cases was adopted by the CAT last year (Sainsbury v MasterCard). The second one was the Arcadia v MasterCard case I posted about on 10 February. There are also more recent decisions by the…

Steve Davies  ‘The deterrence value of competition policy can and should be measured’

This blog post – which can be found here –  pulls together the results from three recently completed papers on cartel deterrence (namely: (1) “The Deterrent Effect of Anti-Cartel Enforcement: A Tale of Two Tails”, with Bos, Davies, Harrington and Ormosi, 2017; (2) “Quantifying the deterrent effect of Anti-Cartel Enforcement”, Davies, Ormosi & Mariuzzo, 2017; and (3) “Cartel enforcement and deterrence over the life of a Competition Authority”, with Armoogum, Davies & Mariuzzo, (2017)). Given that deterrence can never be directly observed – because it refers to events that never occur – the papers are instead based on two statistical regularities that the authors uncovered from close scrutiny of large databases already in the public domain. The first regularity comes from a historical comparison of the overcharges set by 500 legal and illegal cartels. This comparison reveals a significantly lower incidence of illegal cartels in the two tails of the distribution of overcharges – i.e. when it is illegal to…

Joe Harrington “A Proposal for a Structural Remedy for Illegal Collusion“ Antitrust Law Journal, Forthcoming

The argument of this paper – which can be found here – is straightforward: competition authorities should use a structural remedy when penalising some cartels. The remedy would force cartel member(s) to sell productive assets to other firms for the purpose of making the market more competitive.  Given the people the author thanks, and the example he provides, I believe this was inspired by the recent Brazilian experience. The paper begins with an overview of developments in cartel sanctions over the last 30 years, including: (i) the adoption of leniency programs, (ii) a marked increase in the amount of pecuniary penalties, and (iii) the imposition of criminal sanctions. However, ‘Even if all of these developments have resulted in substantial progress in the fight against cartels, the evidence is that current enforcement falls well short of being an effective deterrent. Many cartels continue to form and operate (…). Furthermore, many of these cartels are not the product of rogue employees but…

John Connor ‘Cartels Costly for Consumers’

This working paper – which can be found here – focuses on recent trends in cartels worldwide, with a special emphasis on the economic injuries generated by illegal collusion. The basic argument is that the harm caused by cartels is immense; and that global antitrust fines for discovered international cartels were less than 1% of the economic injuries sustained (my emphasis). The data is derived from his Private International Cartels (PIC) database; in particular, he examined a sample of more than 1100 private international cartels that were discovered between January 1990 and the middle of 2015. It leads to a number of findings: The number of discovered cartels across the world has consistently increased over the last 25 years. This trend is likely related to the increasing number of jurisdictions that  have adopted competition rules and created competition agencies during this period. Affected commerce (i.e. estimates of the dollar value of commerce controlled by these cartels)  are available for about…

Mark Anderson and Max Huffman, ‘The Sharing Economy Meets the Sherman Act: Is Uber a Firm, a Cartel, or Something in Between?’ (2017) Columbia Business Law Review 859

This is a rather long piece – which you can find here – that tries to understand how antitrust should be applied in the context of the sharing economy. I think the spur for this piece is the recent price-fixing case brought against Uber in New York. Regardless of the incentives for writing the paper, it tries to identify the various approaches that antitrust can adopt regarding digital platforms and to determine which one is better suited. The paper also argues that: “Unique to sharing economy enterprises is a structure that approaches a single entity while remaining a set of agreements among individual actors. This structure results in a sharing of economic risks among the participants in a sharing economy enterprise which can incentivize efficiencies in operation that ordinarily are found in a single entity. The article concludes that those efficiencies can overcome anticompetitive concerns about coordination on competitively sensitive matters.” The paper begins by observing that: “antitrust law has…

Unwired v Huawei [2017] EWHC 711 (Pat)

This judgment – which you can find here – is a recent UK court decision on FRAND terms. The factual background to this decision is convoluted (including five “technical” trials relating to the validity and infringement/essentiality of the relevant patents, which preceded the present trial regarding all competition law and FRAND issues), but the situation can be summarised shortly. Unwired Planet is a company that owns a number of worldwide patents, including many of the foundational technologies that allow mobile devices to connect to the Internet (4G, 3G and the like) – most of the relevant portfolio in this case was acquired from Ericsson. A number of these patents are essential to the relevant technical standards, and are thus deemed Standards Essential Patents (“SEPs”). The process of standardisation involves holders of patents which are essential to an international telecommunications standard declaring them to be essential to the relevant standards body –  in this case, the European  Telecommunications Standards Institute (“ETSI”). Standard…